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A key change in the UK’s housing market over the past twenty years has been the growth of the private rented sector (PRS), with more living in the sector than ever before. This growth has led to the view that there is now a ‘generation rent’ who are priced out of home ownership and stranded in insecure short-term lets for prolonged periods of their lives – fuelling concerns about intergenerational inequality.

The UK 2011 Census highlighted that 40% of private renters were young people under the age of 35. With a challenging labour market, rising student debt and welfare reforms, home ownership and social housing is increasingly out of reach for these young people, who end up stuck private renting for much longer than the previous generation.

It was noted by Dr McKee that there is a clear age dimension to the recent shifts in housing tenure, but that the ‘generation rent’ label is more complex than portrayed. Income and family support were emphasised as just as critical in the understanding of young people’s experiences and future plans, as was geography.

Indeed, other research has highlighted that income and family background have a huge impact on young people’s housing market experiences. The Resolution Foundation’s recent report highlights that young people from wealthier families are more likely to become homeowners, suggesting that there are also intra-generational inequalities.

Dr McKee’s study focused on the inequalities facing these young people through qualitative research with 16 young people aged 35 and under living in the PRS in Scotland or England. Those on low incomes were explicitly targeted with the aim of giving them a voice, which was considered to be largely absent in previous research.

Aspirations vs expectations

There was a long-term aspiration for home ownership among the majority of participants, with a smaller number aspiring to social housing. But private renting was seen as the only short-term option as a host of challenges thwart them from realising their ambitions:

mortgage finance

family support

labour markets

student debt

welfare reform

The fact that housing tenure was highlighted by respondents rather than housing type or location, as previous research has highlighted, suggests there is a general dissatisfaction with living in the PRS. Indeed, it was noted that the PRS was discussed largely negatively, perceived as the ‘tenure of last resort’.

Despite the continued aspirations for home ownership, there was a marked difference between aspirations and expectations. There was a levelling down of expectations to own and a gap emerging between what the young people aspired to as their ideal and what they expected to achieve. A small minority even remarked that a more realistic goal may in fact be improvements in the PRS. The study showed that such expectations were due, mainly, to low earnings and insecure employment, combined with a lack of family financial support.

While the short-term nature of private renting makes it a very flexible rental option, it also makes it insecure and precarious, creating barriers for tenants who want to settle into a home and community. This is particularly worrying for families with children, who can be greatly affected by the upheaval of having to regularly move.

Emotional impacts

The study was particularly interested in the more intangible and emotional impacts on ‘generation rent’ and how the frustrations in realising their aspirations impacted negatively on their wellbeing.

It was stressed that issues in the PRS are having serious negative impacts on the wellbeing of young people – insecure, expensive and poor quality housing are contributing to depression, stress and anxiety. Moreover, for those on the lowest incomes, such issues are even contributing to homelessness.

Not only is mental wellbeing affected but their physical health has also been impacted by poor quality housing. Problems with rodents, damp and mould, broken white goods and poor quality accommodation in general were all reported by participants.

The experiences of the young people in the study were described as a “sad reflection of housing in the UK today” and raises questions over whether the PRS can really meet the needs of low income groups in particular.

Geography matters

Another key finding was that where people live really matters, not only because of the spatial nature of housing and labour markets, but also as tenancy rights and regulations vary across the UK.

Recent reforms in Scotland have provided tenants with greater security of tenure and more predictable rent increases. England was highlighted as lagging behind the rest of the UK in terms of regulation and tenants’ rights as it lacks any national landlord registration scheme. Letting agent fees in England were also highlighted as a real issue in relation to affordability.

It was suggested that the rest of the UK could learn much from the Scottish experience, although there is a need to go further, particularly in relation to affordability.

Way forward

A key message from the study was that security of tenure really matters for those living in the PRS but reform of the housing system can only go so far. Participants identified more affordable housing, more protection for renters and income inequalities as areas where the government could intervene to improve things.

Based on the findings, six key policy recommendations were made:

ensure security of tenure;

take action on rents;

provide better education for tenants on their rights, and indeed for landlords;

provide more affordable housing; and

ensure greater understanding of intra-generational inequalities.

If the wider inequalities within society are also addressed, perhaps the PRS could become an aspiration rather than the ‘tenure of last resort’.

It’s been another busy year for The Knowledge Exchange Blog. We’ve covered a variety of subjects, from housing and the environment to education and planning. So as the year draws to a close, now’s a good time to reflect on some of the subjects we’ve been blogging about during 2018.

Bibliotheraphy, walkability and family learning

We started the year with health and wellbeing in mind. Our first blog post of 2018 highlighted the increasing application of “bibliotherapy”:

“The Reading Agency’s Books on Prescription scheme has been running nationally in England since 2013 and since it started has been expanded to cover Books on Prescription for common mental health conditions, Books on Prescription for dementia, Reading Well for young people and Reading Well for long term conditions. 635,000 people are estimated to have benefited from the schemes.”

In February, we blogged about family learning, where parents engage in learning activities with their children. This can involve organised programmes such as Booksmart, but activities such as reading to children or singing with them can also be described as family learning:

“Research from the National Literacy Trust, suggests that “parental involvement in their child’s reading has been found to be the most important determinant of language and emergent literacy”.

In recent years, growing numbers of cities and towns have introduced “shared spaces”, where pedestrians, cyclists and drivers share the same, deregulated space. As we reported in March, the practice has proved divisive, with supporters claiming that shared spaces can improve the urban environment, revitalise town centres, and reduce congestion, while opponents believe that shared space schemes – particularly the removal of kerbs and crossings – are dangerous and exclusionary for vulnerable groups of pedestrians, people with disabilities and those with reduced mobility.

In April, we took the opportunity to promote the Idox Information Service, highlighting a selection of the hundreds of items added to our database since the beginning of 2018. All members of the Idox Information Service have access to the Idox database, which contains thousands of reports and journal articles on public and social policy.

Voters, apprentices and city trees

Local elections in May prompted us to blog about the voting rights of those with age related degenerative mental conditions such as dementia and Alzheimer’s.

“Many people with dementia still hold strong political feelings, and know their own opinion when it comes to voting for political parties or in a referendum. However, the process of voting can often present them with specific challenges. It is up to local authority teams and their election partners to make the process as transparent and easy for people with dementia and Alzheimer’s as possible. Specific challenges include not spoiling the ballot, and the ability to write/ see the ballot paper and process the information quickly enough.”

A year after the launch of the government’s Apprenticeship Levy in June, we highlighted a report from the Reform think tank which suggested that significant reforms were needed to improve England’s apprenticeship system. Among the recommended changes were a renewed focus on quality over quantity, removal of the 10% employer co-investment requirement and making Ofqual the sole quality assurance body for maintaining apprenticeship standards.

The shortage of affordable housing continues to exercise the minds of policy makers, and in July we blogged about its impact on the private rented sector:

“In many cases people view the private rented sector as being a stop gap for those not able to get social housing, and not able to afford a deposit for a mortgage. Although in many instances they may be right, the demographic of those renting privately now is changing, and becoming more and more varied year on year, with many young professionals and families with children now renting privately.”

The long, hot summer of 2018 was one to remember, but its effect on air quality in urban areas underlined the need to combat the pollution in our air. In August, we blogged about an innovation that could help to clear the air:

“Designed by a German startup, a City Tree is a “living wall” of irrigated mosses with the pollution-absorbing power of almost 300 trees. A rainwater-collection unit is built into the City Tree, as well as a nutrient tank and irrigation system, allowing the assembly to water itself.”

Planning, polarisation and liveable cities

September saw another highly successful Scottish Planning and Environmental Law conference. It opened with a thought-provoking presentation by Greg Lloyd, professor Emeritus at Ulster University, and visiting professor at Wageningen University in the Netherlands, who challenged delegates to consider what might happen if the current planning system were to be abolished altogether, to clear the way for a new and more fit-for-purpose planning system.

In October, we focused on the ever-increasing job polarisation affecting the labour market:

In the EU, data shows that between 2002-2014 medium skilled routine jobs declined by 8.9%, whilst high skilled roles rose by 5.4%, and low skilled jobs grew marginally (0.1%). As a consequence, wage inequalities have grown.”

More than half the world’s population now lives in urban areas, presenting significant challenges to local authorities who have to try and make their cities work for everyone. In November, we reported from The Liveable City conference in Edinburgh, which showcased ideas from the UK and Denmark on how to make cities more attractive for residents and visitors:

“A great example of the reinvention of a post-industrial area came from Ian Manson, Chief Executive of Clyde Gateway, Scotland’s biggest and most ambitious regeneration programme. When it comes to recovering from the demise of old industries, the East End of Glasgow has seen many false dawns. As Ian explained, when Clyde Gateway was launched ten years ago, the local community were sceptical about the programme’s ambitions. But they were also ready to engage with the project. A decade on, the area has undergone significant physical generation, but more importantly this has taken place in partnership with the local people.”

Although much has been made of the government’s claim that austerity is coming to an end, many local authorities are still struggling to provide services within tight financial constraints. One of our final blogs this year reported on local councils that are selling their assets to generate revenue:

“In a bid to increase affordable housing supply, for example, Leicester City Council has sold council land worth more than £5m for less than £10 as part of deals with housing associations.”

As we enter 2019, those uncertainties remain, and what actually happens is still impossible to predict. As always, we’ll continue to blog about public policy and practice, and try to make sense of the important issues, based on evidence, facts and research.

To all our readers, a very happy Christmas, and our best wishes for a peaceful and prosperous new year.

In April, the Labour Party launched its strategy for tackling the housing crisis in England. Housing for the Many presents a 50-point plan, with proposals that include:

investing £4bn a year to build one million ‘genuinely’ affordable homes over 10 years

lifting of council borrowing caps

removing the ‘viability loophole’, making it impossible for developers to dodge their affordable housing obligations

zero tolerance of developments without any affordable housing provision

a stricter definition of affordable housing

scrapping the ‘bedroom tax’

suspension of ‘right to buy’

cut-price government loans for housing associations

protected housing benefit for under 21s

consideration of mandatory space requirements

a new generation of garden cities and new towns

Following its publication, analysts in the housing and property sectors gave their thoughts on the strategy.

More affordable homes

The most ambitious proposal is the plan to build 100,000 homes each year.

For Emily Williams, associate director at Savills, this proposal was the most eyecatching:

“The emphasis on investing to deliver more homes to solve the housing crisis, rather than relying on housing benefit to support people who can’t access market housing, is something we have been talking about for a long time.”

However, Savills estimates that the £4bn figure is insufficient for Labour to hit its one million homes target, suggesting that a further £3bn would be needed.

“After Labour’s last 13 years in power from 1997 to 2010, their out-going Chief Secretary to the Treasury famously left a note for his successor: “Sorry, there’s no money”. There is still no magic money tree, and no indication here how these homes are to be funded.”

Developers

Labour’s policy of no development without affordable housing has raised concerns in the property industry. Justin Gaze, head of residential development at Knight Frank told Property Week that the proposals risked deterring developers from undertaking new projects:

“There will be instances where affordable housing cannot be provided, for example on conversions of some buildings where it’s difficult to deliver both open-market and affordable housing side by side.”

The land market

One of the less reported proposals caught the eye of Luke Murphy, IPPR’s associate director for the environment, housing and infrastructure. Writing in CityMetric, Murphy highlighted the proposal to create an English Sovereign Land Trust that would allow local authorities to buy land at cheaper prices to build affordable homes.

“It is here, through intervention in the land market, that the state could have the biggest impact – not to just build more affordable homes, but to make all new homes built more affordable.”

But he argued there was still room for improvement:

“… on land reform, there is scope to be bolder and go further to ensure that affordable housing really is available ‘for the many’, rather than the preserve of the few.

“This makes sense as a measure of affordability, however, this will likely lead to a trade-off between affordability and the numbers of affordable homes delivered, unless capital grants are available at the outset, geared to the income segment to be accommodated.”

RICS also welcomed the plan to lift council housing borrowing caps.

“This is certainly something RICS has been calling for, however appropriate measures must be taken to ensure that local authorities do not expose themselves to too much risk.”

“Of course, abolishing the bedroom tax will help, but tenants’ ability to pay their rent if they are on low incomes is now under assault from the whole range of welfare reforms, of which bedroom tax is only one.”

Final thoughts

The housing crisis has been decades in the making, and there is no quick fix for tackling the problems of housing shortages, affordability and homelessness. Just last month, research by Heriot-Watt University found the chronic shortage of housing in the UK was greater than first thought, amounting to four million homes. To meet the backlog, the researchers estimated that the country needs to build 340,000 homes a year until 2031. This is significantly higher than the targets set both by the Conservative government and the Labour Party.

The new green paper from Labour has presented clear alternatives to the government’s housing policies, and later this year the government is set to publish its own green paper on social housing. The debate will continue, and housing will remain high on the political agenda.

The Knowledge Exchange keeps a close watch on developments in housing. Some of our recent blog posts on the issue include:

The week before Christmas might not seem an ideal time to be mulling over the minutiae of economic forecasts and the implications of tax changes. But on Monday morning, the Fraser of Allander Institute (FAI) review of last week’s Scottish draft budget attracted a big turnout, and helped make sense of the numbers announced by Scotland’s Finance Secretary, Derek Mackay.

Here are some of the key issues to emerge from yesterday morning’s presentations.

Growth: degrees of pessimism

Last month, the UK Office for Budget Responsibility revised downwards its growth forecast for the UK economy to less than 2%. The FAI, meanwhile, has forecast a slightly lower growth rate for the Scottish economy of between 1% and 1.5%. However, the independent Scottish Fiscal Commission (SFC) is much more pessimistic, forecasting growth in the Scottish economy of less than 1% up to 2021. If the SFC’s forecast turns out to be accurate, this would mean the longest run of growth below 1% in Scotland for 60 years.

Dr Graeme Roy, director of the FAI, suggested that the SFC’s gloomy outlook is based on the view that the Scottish working-age population is projected to decline over the next decade. In addition, the SFC also believes that the slowdown in productivity, which has been a blight on the Scottish economy since the 2008 financial crisis, will continue.

Income tax rises: reality v perception

Mr Mackay proposed big changes in Scotland’s tax system, with five income tax bands stretching from 19p to 46p. While these measures attracted the biggest headlines for the budget, the FAI believes that most people will see little meaningful impact in their overall tax bill (relative to income). Charlotte Barbour, director of taxation at the Institute of Chartered Accountants of Scotland, also suggested that the tax changes are unlikely to result in any significant behavioural changes in the way people pay tax in Scotland. And, as has been noted elsewhere, high taxation does not necessarily lead to unsuccessful economies.

However, as the FAI highlighted, perception is important, and if Scotland comes to be seen as the most highly taxed part of the UK, this could have serious implications for business start-ups and inward investment.

Taxation: two systems, multiple implications

Charlotte Barbour also highlighted some of the implications of the tax changes in Scotland that haven’t featured widely in press coverage. How the changes interact with areas such as Gift Aid, pensions, the married couple’s tax allowance, Universal Credit and tax credits will need careful examination in the coming weeks.

Public spending: additional resources, but constrained settlements

The FAI’s David Eiser noted that Mr Mackay was able to meet his government’s commitments to maintain real terms spending on the police and provide £180m for the Attainment Fund. He also announced an additional £400m resource spending on the NHS. But these settlements are constrained in the context of the Scottish Government’s pay policy,

Mr Mackay’s plan offers public sector workers such as nurses, firefighters and teachers earning less than £30,000 pounds a year a 3% pay rise, and those earning more than that a 2% rise. For the NHS alone, this could cost as much as £170m.

In addition, analysis published yesterday by the Scottish Parliament Information Centre (SPICE) has estimated that, if local authorities were to match the Scottish Government’s pay policy, this would cost around £150m in 2018-19.

The budget’s impact on poverty

If the growth forecasts are correct, even by 2022 real household incomes in Scotland will be below 2007 levels. Dr Jim McCormick, Associate Director Scotland to the Joseph Rowntree Foundation, looked at the Scottish budget in the context of poverty, and suggested that three principles need to be addressed before the budget can be finalised: there are opportunities both to increase participation by minority groups in employment and to improve progression in low-wage sectors, such as hospitality and retail; energy efficiency is one important way of lowering household bills and improving housing quality in the private rented sector; and options such as topping up child tax credits and more generous Council Tax rebates are better at reducing poverty than cutting income tax.

Finalising the budget

As all of the speakers noted, the Scottish draft budget is not a done deal. The minority Scottish National Party government in the Scottish Parliament needs the support of at least one other party to ensure its measures are adopted. The most likely partner is the Scottish Green Party, which has indicated that the budget cannot pass as it stands, but could support the government if an additional £150m is committed to local government.

It took until February this year before the Scottish Government’s 2016 draft budget could be passed. Time will tell whether a budget announced shortly before Christmas 2017 can finally be agreed before Valentine’s Day 2018.

The complete collection of slides presented at the Fraser of Allander Institute’s Scottish budget review are available to download here.

Our blog post on the Fraser of Allander Institute’s review of the Chancellor of the Exchequer’s 2017 Autumn Budget is available here.

Housing is one of the challenges of our time. The task for architects and designers is to create affordable, robust housing that can accommodate the needs of a rapidly growing, but also ageing population. And it’s not as easy as simply building. The demands and expectations on house builders to also be community builders and the architects of mental and physical wellbeing through design have led architects and designers to consider alternative ways to house us in the future. This includes innovative use of materials and construction methods, addressing the issue of financing through co-operative living models and using bespoke design to create lifetime homes which can be adapted to accommodate the changing needs of our population.

Large-scale development

One of the big challenges for urban areas is large-scale development strategies for designing and delivering housing to meet need. For developers and planners going forward there are a number of factors to consider: the type of investment introduced to an area; how the schemes fit with a wider development plan for the city; and the importance of engaging the community in any plans to develop or regenerate an area.

“Placemaking”, not just house building is central to large scale development discussions, emphasising to planners, architects and developers the fact that they are not just building houses, but creating communities. As a result, designers and developers should be mindful of their important role in community building, to build the right sort of homes in the right places, at affordable prices and with a legacy in mind. They should, create high quality, long lasting units, which will stand the test of time but that also can be easily adapted to accommodate people’s changing needs.

Alternative construction and design

Innovative models and options for future builds have been discussed for a number of years but they are becoming an increasingly mainstream way to build affordable housing that meets the current need, particularly of students and young professionals, and of older populations looking to downsize or move into assisted care accommodation.

Offsite manufacture or modular homes –Offsite manufacture of timber framed houses is becoming increasingly common, with the constituent pieces of the house manufactured off site, then transported to the site and constructed on a concrete block where foundations and services such as plumbing have already been created. Offsite housing can either be open panel, which requires the finishing such as bathroom and kitchen installation to be done on site, or closed panel which provide the entire section complete with decoration and flooring (this is becoming a common way to build cheap, efficient student housing).

Custom build – Custom build projects are similar to self-build in that they give clients flexibility to select their own design and layout, However, custom build provides slightly more structure and certainty which can make it easier when considering elements like financing and planning applications. In essence, customers select the spec of their house in the same way they might make custom modifications to a car.

Build to rent – This model has been adapted from the United States, where build to rent is popular. The model is based on self-contained flats, with central and shared amenities, entrance and communal space. Designed to attract graduates and young professionals, these are being increasingly designed using a “user first” approach. Developers identify the sort of person they want to live in the development, identify what sort of things they might look for in a development, including floor type, furniture, layout, amenities, gadgets, and then build the development around that.

Dementia friendly – Building homes that are safe and affordable, but allow for independence in old age, is one of the major demands on house builders currently. Housing stock is seen as not suitable for current need, but building bespoke sites for people with illnesses like dementia has been seen as a bit of a niche previously. Virtual Reality (VR) is being used by some architects and developers to try to help them understand the needs and requirements of people with dementia and how they can build homes suitable for them to be able to live as independent and full lives as possible. Building dementia friendly homes not only means making them accessible and open plan, but also adapting the layout, adding signage where appropriate and if possible locating the homes within a wider community development. Dementia villages like those seen in Amsterdam are being used as the model for this.

Co-housing

Co- housing offers an alternative to communities in Scotland, and while lessons can be learned from elsewhere in Europe, where co- housing models have been successful, there are also pockets of good and emerging practice in the UK too. More traditional examples include Berlin, where almost 1 in 10 new homes follow the Baugruppe model, and Amsterdam (centraal wonen) where some of the oldest co-housing projects originate. In Denmark, 8% of households use co-housing models.

Co-housing provides the opportunity for groups of people to come together and form a community which is created and run by its residents. Each household has a self-contained, private home as well as shared community space. Residents come together to manage their community, share activities, and regularly eat together. A “Self-build Cooperative Group” is a joint venture between several private households who plan and build their own house together. Usually they are supported by an architect. Often co- housing groups are able to realise high-quality living space at prices below local market rates, although it is not really considered suitable for large-scale development within the current UK market.

Opportunities for a new way forward

Practitioners are often challenged to push the boundaries of design and building in their field. Looking to new models for future building design provides an opportunity to think creatively about alternative uses of materials and space and to consider options for construction, funding and investment in the built environment that challenge the norm. Learning lessons and exchanging ideas from elsewhere, architects and planners have the opportunity to come together to consider how the built environment in Scotland can help to create places – not just buildings – and how this can contribute positively to the wider wellbeing and happiness of people living in Scotland in the future.

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According to Savills estate agents, about 90,000 people over the age of 65 in the UK downsize to smaller homes each year. On the face of it, that’s a substantial number, but it still leaves more than three million houses under-occupied.

With an ageing population and a serious housing shortage, government at local and national levels is looking for ways to encourage older people to downsize their accommodation so that more family-sized housing is made available.

Benefits of downsizing

Everyone needs good housing, but as people grow older their homes become especially important as places where they can feel safe, independent and comfortable. Downsizing from larger properties can offer significant benefits to older people:

Smaller homes can be easier to heat and have lower utility bills.

People downsizing to sheltered housing can retain their independence, while having access to support when it’s needed.

Smaller homes are easier to manage and cheaper to maintain.

People moving into specialised retirement accommodation can experience improvements in their health and wellbeing.

Enabling people to remain in their own homes may also alleviate the pressures on the country’s social care system – pressures that are likely to intensify as the population age rises.

Downsizing barriers

While there are attractions to downsizing, important factors are putting off large numbers of people from moving to a smaller home. Some may feel too confined in a smaller space, experience problems storing their possessions, or miss having a large garden. Others may feel that they’ve taken a long time to climb the property ladder, and want to enjoy the home they have spent a lifetime working to achieve.

But for those who do want to move, downsizing can be expensive. It may release equity, but some households find the costs of moving – notably stamp duty – may cancel out the financial benefits. And although lower maintenance costs can be a major reason for downsizing, older people moving into apartments may find that costs for maintenance and factoring, may be higher than in a standard family home.

Downsizing: the real story

A 2016 report by the International Longevity Centre (ILC) explored the experiences and expectations of people downsizing from under-occupied housing later in life. The report found that one in three homeowners over 55 are considering or expect to consider downsizing. However, while demand for downsizing is substantial, the reality is a different story:

“In many ways, the older generation is stuck in its current housing, which has resulted in the UK having one of the lowest moving rates amongst its older population compared to other developed countries.”

The study echoed the findings from a 2014 Age UK report which showed that the scarcity of suitable and affordable retirement housing was a barrier to downsizing:

“At the moment, retirement housing makes up just 5-6% of all older people’s housing. Research indicates that many more older people might consider downsizing if alternatives were available, although not just retirement housing schemes.”

The Age UK report noted that, based on demographic trends, specialist retirement housing would need to increase by between 35 and 75% just to keep pace with demand. The report also pointed to poor access standards and cramped accommodation in some sheltered housing schemes as downsizing deterrents.

Alternative approaches

The Scottish Government’s strategy for housing for older people, published in 2011, supports downsizing, and highlights Highland Council’s scheme as an example of good practice. In association with local housing associations, the council has provided financial and practical incentives to support older people wishing to move because their homes are too large for their needs.

Another approach, popular in Scandinavia and the Netherlands, is co-housing, which offers older residents a balance between independence and community life. Co-housing schemes are run totally by the residents, offering support when needed to those who live there, while respecting their dignity and independence.

In the Netherlands, there are now more than 200 co-housing communities. Successive governments there have supported co-housing because it has had such positive impacts on demand for health and social care services.

“One of our purposes is to promote the idea of senior co-housing. Now we have shown the way, we are a living, breathing example, it will encourage people enormously.”

Final thoughts

As the ILC report notes, the policy debate on housing in the UK has focused almost completely on first-time buyers. However, with more than three million homeowners aged 55 or over open to the idea of downsizing, the impact of freeing up large numbers of family homes could be significant. Before that happens, the under-supply of affordable homes meeting the particular needs of older residents needs to be addressed:

“Fundamentally, the notion of downsizing in later life should be about choice rather than obligation. It therefore becomes clear that if we were to develop the right policy environment, we can enhance the choices available to people in later life, encouraging downsizing and creating a more dynamic housing market.”

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The European Union has not had its troubles to seek in the years following the financial meltdown of 2008. Continuing concerns about the euro, the refugee crisis and Brexit are challenging Europe’s leaders as never before, leading to speculation about the very existence of the EU. But at the end of March, new research highlighted an additional challenge that threatens Europe’s social fabric.

The authors of the report described the current situation concerning housing exclusion and homelessness as “a state of emergency” affecting all European countries. Startling figures uncovered by the research show a continent-wide crisis in the making:

In France, the number of homeless people increased by 50% between 2001 and 2012

In Germany, 16% of people spend more than 40% of their income on housing

In Romania, one in every two people live in overcrowded conditions

In the league table of homelessness, the UK now ranks 20th out of 28

The number of families in temporary accommodation in London has increased by 50% since 2010

In Copenhagen, youth homelessness has increased by 75% since 2009

In Warsaw, the number of people sleeping rough or in emergency shelters has risen by 37% since 2013

One in 70 people in Athens are now homeless

Vulnerable groups

The report finds that young people across Europe are being hit especially hard by housing exclusion.

“In all EU countries, young people are more vulnerable to prohibitive housing costs, overcrowding and severe housing deprivation than the rest of the population. For poor young people across Europe, the situation is becoming unbearable, with 65% in Germany, 78% in Denmark and 58% in the UK spending more than 40% of their disposable income on housing. The average in the EU is 48%.”

The report also found that Europe’s poor are being side-lined at a time when housing expenditure has increased while incomes have fallen.

“In general, people living below the poverty threshold are increasingly marginalised by a private rental market that feeds off a systemic lack of affordable housing.”

Non-EU citizens are another vulnerable group experiencing housing difficulties:

“Two-thirds of non-EU citizens are overburdened by housing costs in Greece, almost half in Spain and Belgium, more than one third in Ireland and Portugal, and more than one quarter in the United Kingdom, Denmark, the Netherlands, Italy, and Slovenia.”

Unfit conditions

While homelessness and the rising cost of housing are proving to be growing problems across the EU, poor housing is are also a Europe-wide issue. Across all European countries, a poor household is two to twelve times more likely to live in severe housing deprivation (leaking roof, dampness, poor sanitation) than other households, and in the European Union as a whole, one person in six lives in overcrowded housing.

Fuel poverty is another significant problem, affecting almost a quarter of poor households across the continent. In the UK, 9.4% of the population and 20.2% of poor households experience financial difficulty in maintaining adequate household temperatures.

Eviction: “a collective abandonment of other people”

An entire chapter of the report is dedicated to eviction, which the authors describe as “…one of the worst forms of violence that can afflict someone.”

The figures from national governments and Eurostat highlight significant variations in the pattern of evictions in each EU country, with surges in the number of evictions in Bulgaria, Cyprus, Ireland, Latvia and the Netherlands, while six countries – the Czech Republic, Denmark, Croatia, Lithuania, Portugal and Sweden saw substantial reductions in the number of evictions.

The figures also show varying trends within the UK and differences between the private and public sectors. In England and Wales, rental disputes rose in the social housing sector, but fell in private housing; in Northern Ireland, property foreclosures rose slightly, while tenant evictions rose dramatically by 75%; in Scotland, eviction procedures of all kinds fell by 17%.

Addressing the issue

The report argues that the tools for dealing with the challenges of housing exclusion in Europe already exist, including Europe-wide networks of local, regional and national governments, and EU initiatives, such as the Urban Agenda and the European Pillar of Social Rights. The authors note that there are many examples of good housing practice, notably in Finland, whose “housing first” strategy has achieved a reduction in homelessness – the only EU country to do so.

However, the authors contend that Europe’s leaders need to rapidly activate the political will to tackle the problem of housing exclusion:

“The EU and Member States should place the elimination of homelessness in the core of their social policy agendas. Responses to homelessness should be mainstreamed into the design and implementation of relevant sectoral policies including youth, gender, migration, and Roma inclusion. The EU and the Member States can and should act to enforce social rights.”

Final thoughts

The report’s figures make sobering reading: more than 36 million households living in overcrowded conditions; almost 11 million households facing severe deprivation; more than 22 million households experiencing fuel poverty. Perhaps most worrying is the number of homeless people in Europe. This is an unknowable figure, but all the indications are that it is rising dramatically.

Published a week before the UK signalled its intention to leave the EU, the report received comparatively little media coverage. But if the problem of housing exclusion and homelessness continues to grow, it threatens to overwhelm political leaders at EU, national and local levels. It’s no exaggeration to suggest that homelessness could rival Brexit in its impact on the future of Europe.

Long regarded as a relic of the past, prefabricated housing is now emerging as a potential solution for the UK’s chronic shortage of affordable homes.

Britain’s golden age of prefabricated housing happened after World War II, when the government authorised thousands of factory-built homes to replace housing destroyed by bombing raids. Intended to last for no more than ten years, many prefab homes were still occupied thirty years after construction.

For a period during the 1960s, prefab housing enjoyed a resurgence. One scheme was showcased at Montreal’s Expo 67 as a solution for high-quality housing in dense urban environments. But in Britain prefabs became associated with shoddy, damp and dysfunctional housing. The largest remaining post-war prefab estate, located in London is now facing demolition.

The prefab renaissance

In recent years, prefabricated housing has been rebranded and is now showing signs of making a comeback:

In Yorkshire, the Legal & General insurance firm has opened the world’s largest modular homes construction factory.

In Manchester, regeneration company Urban Splash is developing a 43-home scheme, with each house designed by the customer, then built offsite and shipped to the New Islington estate.

Renewed interest in prefab housing has been driven by the severe shortage of housing in the UK, along with the rising cost of traditional construction methods. At the same time, new materials and construction techniques have made prefab homes a more economic and attractive option. This week, leading engineering firm Laing O’Rourke has suggested that the acute lack of space in Britain’s cities could lead to the next generation of tower blocks being built almost entirely off-site.

In its 2017 housing white paper, the government proposed measures to stimulate the growth of the offsite construction sector and promote more factory built homes through the Accelerated Construction programme and the Home Builders’ Fund. The paper highlighted Creekside Wharf in Greenwich as a good example of prefab housing’s potential.

The benefits and challenges of prefab housing

The champions of prefab housing argue that it provides comfortable, well-insulated homes that can be constructed much more quickly than traditional building. Offsite construction can deliver a modern prefab apartment block in half the time that it would take to build using traditional methods, which means that units for sale or rent can start making money more quickly. Proponents also argue that offsite construction generates less noise, dust and disruption for neighbours. And although offsite costs remain higher, the margin is narrowing as prefab manufacturing achieves efficiencies of scale.

But although today’s prefab homes are a world away from their post-war forerunners, critics have argued that contemporary prefab housing is no match for a traditionally-constructed home. There have also been concerns that prefab homes could be deployed as a quick fix. The Guardian’s architecture and design critic, Oliver Wainwright commented:

“If taken up as the silver bullet to endless waiting lists, there’s a very real risk it could sow the seeds for a future of cheaply built, meanly scaled, less stable housing that can be conveniently swept away at a moment’s notice.”

Some have expressed concern that factory-built homes could end up deskilling traditional building, but others believe that prefabricated housing could plug a skills gap in the construction sector after the UK leaves the European Union. Meanwhile, lenders to developers are still cautious about financing prefab projects until their long-term durability has been tested.

Prefab present…

Despite these reservations, prefab housing is shedding its outdated image and increasingly entering the mainstream housing sector. In some areas, factory-built housing is already being deployed to help people with urgent housing needs.

The architecture firm of Rogers Stirk Harbour and Partners is internationally famous for its cutting edge projects, from Heathrow Airport’s Terminal Five to the National Assembly for Wales. But in 2015, the firm joined forces with the London Borough of Merton, the YMCA and Aecom to create Y:Cube. The first 24-home Y:Cube development is located at Mitcham in south-west London, and took just five months to build. Tenants come from YMCA hostels and Merton’s housing waiting list, finding the flats as welcome alternatives to hostels and B&B accommodation. A similar project is taking place to provide Y:Cube accommodation for local people with acute housing needs in the London borough of Lewisham.

Beyond the capital, further prefab housing developments are in the making:

Manchester City Council has been leading an offsite construction consortium of 17 housing associations with the aim of building hundreds of new homes in the north of England.

In December 2016, Your Housing Group announced a partnership with a Chinese construction firm to deliver 25,000 prefabricated homes over the next five years.

Swan Housing Association is building an 18,000 sq ft factory to deliver new homes for the regeneration of Basildon’s Craylands estate.

…and prefab future?

While prefab housing is gathering pace, one entrepreneur is taking the concept to the next level. Alastair Parvin, a graduate of Sheffield University’s school of architecture, believes that harnessing the possibilities offered by technology can make building a house more straightforward.

The idea behind Parvin’s “WikiHouse” is to enable users to draw up plans for their new home online. But instead of the house then being constructed at one offsite location, the components will be manufactured by a network of small business and community spaces – known as maker-spaces.

We’ve come a long way from the prefab housing of the post-war years, and perhaps there’s some way to go before the vision of the WikiHouse is realised. In the meantime, prefabricated housing could offer a much-needed boost to tackling the nation’s existing housing shortfall.

If you liked this post, you may also be interested in our other blog posts on suggestions for tackling the UK housing crisis:

The Ter Meulen Building, Rotterdam: 21st century residential apartments built on top of a post-war shopping centre

The housing challenges facing London are well documented::

London needs around 50,000 new homes a year, but housebuilding is running at around half that.

Between 2005 and 2015, private rents in London rose by an average of 35%.

Future projections suggest there will be 9m people in London by 2020, 10m by 2030 and 11m by 2050.

There are now serious concerns that the lack of affordable housing and rising rents risk driving key workers out of London, and may cause businesses to think twice about locating in the capital. But as well as triggering dire warnings about the future of London and the UK economy, the housing crisis has also prompted increasingly creative ideas on how to solve it.

Going up

Last year, Darren Johnson, who represented the Green Party on the Greater London Assembly, proposed five ideas to secure land for affordable homes. One of his proposals was to build additional storeys on top of existing buildings.

Johnson suggested that this approach has many advantages over demolishing existing properties and building new homes, including:

a shorter period of disruption for residents;

more environmentally friendly than demolition and rebuilding

an opportunity to refurbish the existing homes

He offered the example of the Ducane Housing Association in Hammersmith, which built 44 new homes on top of two 1970s buildings. Based on data from London’s Borough Councils, Johnson estimated that almost 50,000 new homes could be built using Ducane’s example.

One potential stumbling block is the difficulty of getting planning permission for intensive construction projects in the heart of active communities. However, in July 2015, the Treasury signalled the government’s intent to end the need to obtain planning permission for upwards extensions in London.

Building on public buildings

Another approach, on similar lines, is the idea of building new homes on top of publically owned buildings. In 2015, WSP professional services consultants conducted a survey to gauge interest in the idea. Among their findings:

61% of respondents supported the idea of allowing private developers to refurbish government buildings, allowing them to make their money back by building additional housing on top of the refurbished building, which they could sell for profit.

Over 60% of Londoners would happily live above a library, while 44% would be willing to live above a government administration building, and around a quarter of Londoners would be willing to live above a school or hospital.

The WSP report went on to suggest that developing all available sites by building apartments above all available public buildings in London could provide over 630,000 residential units.

“Of course we acknowledge that not every building will be able to be redeveloped in this way, but even targeting one in every two municipal buildings could go a long way in solving the housing crisis, providing 315,000 homes.”

These homes, the report argued, would be most suitable for key workers employed by these facilities, or by students, older people and young professionals. Some may even house those working in the facilities below.

One landlord is already exploring the idea with several London councils. Apex Housing Group has experience of converting airspace above properties into luxury penthouse apartments. Managing director Arshad Bhatti believes the principle could be applied to affordable homes:

“We are working with a number of local authorities across London and expect airspace development projects will help bridge the gap between demand and supply of new homes in London – crucially with minimum lead times, and offering maximum value for property owners.”

The view from overseas

The idea of building up may be relatively new to London, but other densely populated cities have already been exploring its possibilities.

In Rotterdam, developers have been combining ultra-lightweight materials to build apartments on top of a 1940s shopping centre.

In New York, a developer is planning to construct a nine-storey condominium on top of apartments dating from the 1950s.

In Paris, three prefab dwellings attached to the rooftops of existing buildings were completed in January 2016.

The architects of the Paris project believe it has multiple benefits:

“Building on top of the roofs is not only an ecological and economical solution, it’s working against the urban sprawl that kills the social link. It’s also a contemporary way to discover new perspectives of the city, a new Paris above the horizon.”

But not everyone is happy with the idea. Residents in the existing apartments beneath the proposed New York condominium are concerned that the wear and tear of construction could damage their properties. And they’re also worried about the stability of the columns supporting the new building.

The only way is up?

Clearly, building on existing properties is not without its problems. But as the housing crisis in London intensifies, and spreads to other parts of the UK, it’s an idea that may no longer be regarded as pie in the sky.

If you liked this post, you may also be interested in other blog posts on suggestions for tackling the UK housing crisis:

In March 2016, a study by the Centre for Economics and Business Research highlighted the growing problem of rising rents in the UK. The Cost of Renting found that the average private rent in England is growing at an annual rate of 2.5%, and forecast that rents were set to rise by 28% on average by 2026. The findings support recent studies suggesting that the UK is now the most expensive place in Europe to rent.

In contrast to the UK, renting in Germany is less expensive. For historical as well as economic reasons, only 43% of Germans are home owners (compared to over 70% in the UK). The rest rent their homes, making rent rises a highly sensitive political issue in Germany.

In recent years, Germany has been experiencing a housing shortage. Last year, the Cologne Institute for Economic Research reported that in 2014 the number of new flats and houses built in the biggest cities was 50% fewer than needed to cope with rising population numbers. As a result, rents in Germany have been rising more steeply.

Introducing rent caps

Last year, concerns about keeping homes affordable for tenants on average incomes prompted the German government to introduce legislation on rent control. The new law means that private landlords taking on new tenants can only raise rents by up to 10% above the local average for similar properties.

Even before the law was passed the state government of Berlin had announced that it would be the first city in Germany to introduce rent controls. In recent years, the German capital has been growing by around 50,000 people a year, putting greater strains on the city’s housing market. Rents in Berlin have risen on average by almost 53% in the past five years, and in some districts, by 79%.

The trend has raised concerns among Berliners that their city could be on the way to emulating London, where growing numbers of people are struggling with the cost of living in their private rented homes. The Cost of Renting report found that Londoners on average spend nearly a third of their disposable income on rent payments, and suggested that worsening rent affordability may push residents on lower incomes out of the capital. Rent control is one measure intended to prevent Berlin going the same way as London.

Image: James Carson

The impact of rent controls

Within weeks of Berlin introducing its rent cap, there were signs that the move was having an immediate effect, with the average rents per square metre falling by 3.1%. But in February 2016, a survey of Berlin rents by CBRE found that the year-on-year rise across the city for 2015 was 5% (compared to the 2014 rise of 6.5%).

On the face of it, this looks like the new controls are not working. But the rent cap was always intended to slow down Berlin’s spiralling rents, rather than bring them to a halt, and on those terms the law has been effective. Moreover, while new rents for Berlin’s most expensive apartments rose by 5.7%, rent rises for the cheapest 10% of flats rose by just 2%.

And, as if to underline how serious Berlin is about tackling rising rents, in addition to the rent controls on private landlords, the Berlin state government has also introduced new rules for over 500,000 social and state-owned housing tenants, guaranteeing that rent rises will not price them out of their homes.

Lessons for the UK?

Since Berlin introduced rent controls, other German states, including Hamburg and Bavaria, have followed suit. This has prompted some commentators to wonder if the idea could help to tackle the UK’s housing crisis.

A recent report from Shelter highlighted the serious impact of rising rents in London:

“Those who find it difficult to pay their rent are likely to cut back on food for themselves or clothes for their children. Others get deep into debt to avoid going into rent arrears or to cover the high costs of frequently moving home. At worst, a growing number of London renters lose their home and become homeless.”

Although London has seen the steepest rises, other parts of the UK have also been affected. In April 2016, figures showed that rents on new tenancies in Greater London were, on average, 7.7% higher than a year ago. But in Scotland the increase was 7.3%, just ahead of the East Midlands with 6.8%.

Writing in the Financial Times, columnist Jonathan Eley acknowledged the differences between the UK and German housing markets, including the high numbers of renters in Germany and the larger number of properties owned by institutions (in contrast to the UK, where most private rented sector properties are owned by individual buy-to-let landlords). However, he concluded that the UK had something to learn from the introduction of rent controls in Germany:

“It is not perfect, but it does a much better job of balancing the interests of tenants and owners than the policies of successive UK governments, who have basically ramped up house prices without much thought for the long-term consequences.”

It’s still too early to say whether Germany’s attempt to tackle rising rents will have a long-lasting impact. But if the measures succeed in putting a brake on spiralling rents, there may be growing calls here to follow Berlin’s example.

Further reading
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